Today’s AM fix was USD 1,300.25, EUR 948.33
and GBP 775.20 per ounce.
Yesterday’s AM fix was USD 1,292.75, EUR 939.91 and GBP 766.67 per ounce.
Yesterday’s AM fix was USD 1,292.75, EUR 939.91 and GBP 766.67 per ounce.
Gold fell $3.40 or 0.26% yesterday to
$1,293.30/oz. Silver slipped $0.02 or 0.1% to $19.53/oz.
The historic 120-year old daily silver fixing
process will cease as of 14th August this year, the London Silver
Market Fixing Limited company announced today. The company that
administers the daily silver fix currently consists of three member
banks, Deutsche Bank, HSBC and Scotia Bank.
Silver
in US Dollars – Weekly, 10 Years (Thomson Reuters)
An informational letter released this morning
by the company and signed by Simon Weeks of Scotia Bank, current
chairman of the silver fixing, attempts to address a number of
concerns that users of the silver fixing data may now have.
In answer to the question of what happens after
14th August for those market participants who have contracts and
terms and conditions referencing the Silver Fix, the Chairman states
that “The Company is not in a position to comment on such matters,
but market participants can speak to their contractual
counterparties.”
The reason for the ending of the fix is due to
increased regulatory scrutiny of the gold and silver market due to
allegations of price rigging and manipulation. Many analysts believe
that market manipulation has contributed to sharp sell offs and price
weakness in recent months.
Platinum and palladium added to sharp gains
made overnight on worries that increasing labour tensions in major
producer South Africa and tensions with Russia could hurt supply.
Gold edged up and broke above $1,300/oz on escalating violence in
Ukraine and heightened geopolitical tensions.
Mark
O’Byrne with Max Keiser on Russia Today
Ukrainian troops were attacked and seven were
killed by pro-Russian separatists yesterday, in the heaviest loss of
life for government forces in a single clash since Kiev sent soldiers
to put down the revolution in the country’s east.
East-West relations are being poisoned by the
day and this should support gold prices.
Russia retaliated against U.S. sanctions by
hitting strategic aerospace projects, including refusing to extend
the life of the International Space Station, a showcase of post-Cold
War cooperation.
After four deaths over the weekend, South
Africa upped security in the platinum belt to protect miners who have
decided to ditch a 16-week strike that has halted 40% of normal
global output.
Hundreds of stick-wielding miners barricaded
roads and torched roadside vegetable stalls near Lonmin’s South
African platinum mine on Tuesday, in an attempt to block fellow
strikers from breaking rank and going back to work.
Platinum edged up 0.4% to $1,452.00 an ounce
after jumping about 1% in the previous session to its highest in a
month. Palladium also rose 0.4% after rising 1.1% overnight to a
one-week high.
Platinum stockpiles having been reduced and
this should lead to higher platinum prices.
South Africa is the top producer of platinum
and second biggest producer of palladium after Russia.
MAX
KEISER INTERVIEWS MARK O’BYRNE GOLDCORE’S DIRECTOR OF RESEARCH,
ON BAIL-INS
Keiser: Mark,
you have a new report on bail-ins - From
Bail-Outs to Bail-Ins: Risks and Ramifications … Ok so the
era of bondholder bailouts is ending and that of depositor bail-ins
is coming. Tell us about your report.
O’Byrne: The
risk of bail-ins has been coming in a very stealthy manner and
under-the-radar way. Most people aren’t actually aware of it. It is
very much on the radar now and is coming from the very top and the
Bank of International Settlements, through the various central banks,
and the legislation is there.
Only last week, the European Union and Dutch
Finance Minister, Dijsselbloem, the Chairman of the Eurogroup Finance
Ministers, confirmed that in the EU, they are ready to go in 2015 …
The concern is, the legislation is there but if something happens and
you have a ‘Black Swan’ event, you have a Lehman Brothers type of
event, the legislation could be expedited and you could see them
happen sooner rather than later.
That’s
just the EU, it is also coming in the UK through the Bank of England,
they have legislation in conjunction with the FDIC and so the
bail-ins are coming in the UK, in the U.S. and indeed throughout most
of the western world. Most G20 nations have signed up for bail-ins -
not all of them but most of them.
So it is a real risk and it has happened in
Cyprus. And in Cyprus when it happened, the authorities said it was a
once-off, because of all of the hot Russian money that is in Cyprus,
and this will not happen anywhere else…but meanwhile they are
planning for that scenario in most of our countries and people need
to be aware of that and they need to prepare.
Although they said that Cyprus was a one-off,
most G20 countries are all legislating and preparing for a similar
scenario in their home countries.
Keiser: Yes.
Just this past weekend, David Cameron, UK Prime Minister, here in the
UK was making some interesting comments, can you talk about that a
little bit?
O’Byrne: Yes.
It was just yesterday, actually. Cameron was talking on Sky News and
in the recent UK Budget, again it was quietly put in there, almost in
the p.p.s, down the bottom in the small print, they basically brought
in new powers whereby HM Revenue can actually go in and raid people’s
bank accounts, on the basis that they may not have paid taxes but the
authorities do not have to prove it. So it is simply the word of the
Revenue versus the individual and they don’t have to have any proof
whatsoever.
There are various people in the UK Parliament,
opposition MPs, have begun asking questions about this and indeed
people in the financial services industry in the UK, including the
Chartered Accountants body, they are asking questions about this and
saying ‘hang on a second’, this goes against basic principles of
law.
It creates a new power that is quite a
dangerous power for a government to have. We have seen throughout
history that when governments have such powers they tend to use them.
It was interesting that Cameron justified it in
the context of…he said that if we do not do this then we will have
to increase taxes. He is basically trying to scare people by saying
let us have these powers…these extraordinary, extraordinary powers
and if you do not give us these powers, we will increase your taxes
so it was almost an implied threat and again it is another threat to
people’s deposits and savings and it shows how risky and vulnerable
the banking system is .
People need to be aware of that and not have
all of their savings in these banks.
Keiser: Right,
well, of course governments have a history of political prosecution
using these techniques. We have seen this in the U.S. and around the
world. When the government doesn’t like what people are saying,
whether it is Julian Assange or others. And now they have the
sanctions and blockage against Russia and Iran, they use the
financial and the banking system for political ends.
Clearly, the UK now has the ability to do that.
And the idea that a government can just come in and steal money and
confiscate money is a recurring theme. We have seen it, as you point
out, in Cyprus and elsewhere. So your point is that laws around the
world and for the G20 nations have now been changed over the last
year or two so that bankrupt or kleptocrat governments can start
stealing money out of people’s accounts directly.
It was seen in the USA with Jamie Dimon and JP
Morgan and Jon Corzine in the MF Global case when the bankers took
clients’ money. Many bankers are committing suicide because they
are ashamed of their industry. So this is giving the bankers more
power. Governments are still giving the bankers more power to be more
psychotic in their behaviour. I would anticipate that the banker
suicide rate would skyrocket so there is a silver lining to this.
Keiser: … Who actually had their deposits
taken in Cyprus and what is a bail-in, Mark?
O’Byrne: Basically,
in Cyprus it was people with deposits over €100,000 who were bailed
in. People think, well, bail-ins only affect rich people and it was
actually justified on that basis and the authorities said that this
is just…initially, they said this would only hit the ‘hot’
Russian money and then there was the realisation that Russian money
was only a tiny minority of the deposits that were confiscated.
People don’t understand and think it was just
the rich who were affected. It is not. Your average-sized, small or
medium-sized enterprise business (SMEs) could easily have €100,000
to €300,000 on deposit and that is what they use to pay the
salaries of their employees.
This is the key thing that people are not
understanding and the ramifications of this…It is justified as
almost a socialist measure whereby we are redistributing wealth from
the very wealthy 1% (or the 0.1%) to the middle classes who are
suffering from austerity. Nothing could be further from the truth.
They are actually penalising and going after the savings of the
middle classes and again protecting the interests of the 1% (or the
0.1%) and they are basically protecting the interests of large banks
at the expense of small banks and smaller institutions and of the
SMEs.
The
other ramifications of bail-ins are that there are capital controls.
So even in Cyprus today they still have not relaxed capital controls.
So with bail-ins come capital controls and again it speaks to the
need to have your savings outside of the banking system, to own gold
and silver, physical coins and bars and own them in the safest way
possible either in your possession or in vaults, outside the banking
system, in allocated
gold accounts, in safer jurisdictions around the world.
Keiser: Let’s
give some historical context here. The banking system collapsed
because of massive fraud. Recall 2004 the U.S. Fed gave their
blessing to QE and near zero percent interest rates and a way to
‘stimulate’ the economy as a way to get things going again. Six
years later and we’re in a huge asset bubble but the underlying
economic numbers are still atrocious, but they cannot lower rates
anymore, so they have two options. Option A – negative interest
rates where they store people’s money at bank or option B, they
just steal it out of their accounts through the bail-in process that
you are describing.
So is this a way to soften people up to the
idea of accepting negative interest rates? In other words, the
governments will say, “Either you let us charge you negative
interest rates, that is to say, you have got to pay us to keep your
money in the bank at 2 or 3% per year, or we are just going to take
it outright and we have the legal basis to do that and if you do not
let us do that – you are a terrorist.”
Isn’t that what they are setting everyone up
for Mark?
O’Byrne: Well,
it is an interesting angle. It is a way that they could justify that.
In effect, we have negative real interest rates right now – when
you take into account the real rate of inflation. The official
measures of inflation appear very compromised to many of us who have
looked at them.
If you look at the actual deposit rate that
you’re getting from the bank, it is below the real rate of
inflation. And then on top of it you have taxes levied on that as
well.
It is just absolutely incredible and it is
bizarre as they claim that they are putting these measures in place
as they are trying to protect the banks and avoid what they call the
“doom loop” which is a connection between the sovereign and the
banks but by doing what they are doing, they are actually making the
banks more vulnerable. They are more likely to cause bank runs.
It would make a cynical person wonder what is
the real agenda here? Is it to strengthen the Wall Street banks
instead of the small banks?
And the negative interest rate scenario is just
incredible, people will soon take their money out of their deposit
accounts, like the runs on banks we’ve seen in recent years.
Keiser: Mark,
what we’re saying is that if somebody calls their bank and says, “I
need to move my money out because now you’re charging me a negative
interest rate”, they’re gonna say, “to hell with you, we’re
gonna penalise…you’re a terrorist for supporting Bitcoin”.
They’ve already used the language to equate Bitcoin with terrorism.
“So we’re just gonna take money out of your account.” So, first
of all, any money in a bank, any of the big four banks in the UK or
in the U.S. or in Europe — only keep money in those banks that you
are willing to lose. Lesson number two, if you want to maintain your
wealth going forward — by wealth I mean economic sovereignty
against the pernicious plutocratic kleptocrat nightmare — it’s
got to be held outside a bank, in a vault, in gold, in silver or in
Bitcoin or another like-minded cryptocurrency.
Mark, we’ve got about a minute left.
Different countries are of course approaching this bail-in scenario
differently. Can you give us a little idea of which country is and
how far along they are and which is the worst and which is becoming
the worst. We have about a minute left. Go ahead.
O’Byrne: I
wouldn’t say the worst, I mean, in terms of the scenario, the
scenario is the same everywhere. In terms of being more advanced with
legislation and that, the European Union seems to be more advanced.
But it is in, as I said, the Bank of England and the FDIC
legislation. And they are, I suppose…the driving force is, as I
said, from the Bank of England and the Bank of International
Settlements. So that’s coming down into the Bank of England and the
ECB, and indeed the Federal Reserve. But it is very much…because it
is the Bank of International Settlements, it’s more obviously the
western central banks. The Chinese, the Russians have been slow to, I
suppose, they are non-committal and there is no…
Keiser: Let
me jump in there for a second. You just mentioned the Chinese, the
Russians, the Iranians…oh, wait a minute, that’s the Shanghai
Cooperation Organization, oh, wait a minute, that’s where the NATO,
the USA, the EU are going to war with them in Ukraine! Gee, I wonder
if there’s any connection? That those are the only independent
central banks in the world and the US is bombing them and, you know,
Victoria Nuland is claiming that they’re, you know, “terrorists”.
Gee, I wonder if there’s a connection, Mark? I wonder. Anyway,
that’s all the time we have. Mark, thanks again for being on the
Keiser Report.
Protecting
Your Savings In the Coming Bail-in Era is the guide we
compiled to protect people from bail-ins.
The
video of the interview can be watched here.
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